FOUR SIGNS YOU ARE READY TO PURCHASE A HOME

Becoming a first-time homeowner can seem intimidating and many would-be buyers struggle with knowing when the time is right.  When it is right, buying a home can be a smart and exciting investment in your future.

Moving up to your next home can cause even more anxiety because the market and process may have changed and you are also trying to juggle the sale (or rental) of your existing home.

Although every situation is different, there are a few indicators that can help you determine if you are ready.

YOU KNOW YOUR CREDIT SCORE AND HAVE ADDRESSED ANY ISSUES
Before you begin your house hunt, it is important to know where you stand financially. As a first step, you should be meeting with a Loan Officer to review your credit score and debt to income ratio to determine if there are any problems that you should address. Fixing or improving your credit score can have a dramatic impact on the interest rates available to you, which will factor into your payment. A higher credit score can result in saving you thousands of dollars in the long-run.

The lender can also tell you what price house you should shop for based on what monthly principal payment plus interest, taxes and insurance total payment your are comfortable having. Many lender will just tell your the max price you qualify to receive a mortgage but be careful, you may be approved for more than what would be a comfortable payment.

YOU HAVE BUILT UP YOUR SAVINGS
Although it is a myth that you need to have 20% down in order to buy a home, it is important to have a nest egg ready for the costs associated with both the down payment, loan closing expenses, transaction fees, move, and any unexpected costs. When you’re a first-time homeowner, your Loan Officer understands and can review your goals and help you create an estimate for how much you should have saved. Regardless, if you think you may want to buy a home in the future, it is never too early to start setting money aside.

YOU HAVE TALKED TO A REAL ESTATE AGENT ABOUT THE PROCESS, MARKET AND YOUR TIMING
In many cities, a mortgage payment for an entry level home is comparable to the cost of renting but not always. Take a look at the type of properties you are interested in owning and use a reliable mortgage calculator that includes the principal payment plus interest, taxes and insurance to determine the estimated monthly payment to see if it lines up with what you discussed with the lender. A local, experienced agent can help you understand if your expectations are in line with the market. They can also review the purchase process with you so that you know what to expect when it come to paperwork, process and timing of your home purchase.

It's a little more complex when you already have a home. You will need to determine the the price you could sell your home for (hint, your tax statement is probably as close to accurate as online house values estimators so start with that) then to keep the numbers round, take about 10% of that prices off the top for selling/moving expenses. If that number doesn't pay off your mortgage, you may need to bring money to the sale or you may want to consider renting your house out. If the value seems reasonable, ask a local, full time agent to visit your home and give you a true MARKET value estimate. Make sure you choose an agent that is exerienced in helping people buy and sell homes AT THE SAME TIME as it can be a careful juggling act.

YOU LOVE YOUR CITY AND PLAN TO STAY THERE A WHILE
The benefits of owning a home are significant if you plan to live in your home for more than a few years. However, buying and selling under the three-year mark could potentially eliminate the financial benefits that a long-term owner would see. If you intend to be in your current city for the foreseeable future, it’s great to consider buying rather than renting or moving up to your dream home.

Start your home search now!

Get an estimate of the market value of your home.

Hire Sarah Marrinan to get started today!